Major League Baseball teams are up in value by 3 percent from 2020, per the annual report from Forbes’ Mike Ozanian. Baseball’s 30 clubs are now being valued at an all-time high of $1.9 billion. The Yankees saw a 5 percent bump to $5.25 billion at the top of the list. They are not only the most valuable franchise in baseball, but one of the top three most valuable franchises in North America, along with the Cowboys and Knicks. Despite the operating losses many franchises suffered because of the pandemic, the long-term values were buoyed by the sale of the Mets and the valuation of the Boston Red Sox with their pending private equity deal. Ozanian reports that revenue was down 65 percent in 2020 as teams lost $1.8 billion after raking in a $1.5 billion profit the year prior. Check out the full article for the list and methodology. More from around the game…
- “Complex information and simple messages,” that’s the key to the Rays’ run prevention plan, per MLB.com’s Adam Berry. The Rays believe in their ability to develop arms and find value where other teams have missed it. The Rays are famous for their analytical approach, but it might be their ability to effectively communicate their findings to the players on the field that truly makes them stand out as a development center. Throwing strikes and simplifying the approach is a big part of that, but so is giving confidence to guys who have struggled with other organizations. This year, the Rays’ approach will truly be put to the test as they attempt to replace nominal stars like Blake Snell and Charlie Morton with veterans like Chris Archer, Michael Wacha, and Rich Hill.
- After the bullpen logged more innings than starters in their opening series against the Reds, the Cardinals may soon have to consider adding a ninth reliever to the roster, per Derrick Goold of the St. Louis Post-Dispatch. Jake Woodford made the opening day roster exactly for this possibility, and he soaked up 2 1/3 innings on Saturday afternoon. Seth Elledge and Kodi Whitley are two bullpen arms on the taxi squad that could be added to the roster if the Cardinals decide they need another arm for their series against the Marlins.
But…. but…. the owners are so poor.
The losses were biblical I tell you!!!!!!!
Valuation doesn’t mean anything. Valuation of teams is not liquid assets. so they don’t really apply. The only thing that matters towards payroll decisions is revenue. Successful business owners in any business do not pay employees out of their own pockets. They also do not pay employees with pieces of the business in general.
The Knicks are valuable?
Well there’s a shocker. I understand Madison Square Garden is valuable but trust me on this: that team is worthless.
That was my reaction. Imagine how valuable they’d be if they actually were better run and not owned by the Dolan’s.
If the Knicks were a powerhouse again, the NBA would be swimming in so much cash they wouldn’t know what to do with it.
Actually they have been very disciplined in the last year and a half or so from a management perspective. It appears Leon Rose and Wes have convinced Dolan to not meddle with things. And what do you kno they are most likely going to be in the playoffs for the first time in like 8 years lol.
I will watch the Knicks again when they are in the finals.
Maybe.
Sadly, you’re too young to remember the teams of the late 60’s, early 70’s, under Red Holzman. They were a treat.
The Knicks aren’t valuable based on their performance, but on their market. I think their TV network is part of the equation as well.
I’m quite sure if the Steinbrenner’s put the Yankees and related properties up for sale, the purchase price would easily exceed Forbes’ estimates, north of $7B.
The network is quite valuable, but the property isn’t exactly in a premium location.
Valuation is mot an exact process by any means. The owners usually buy teams as a vanity project. It’s not clear whether baseball will exist as a major spectator sport as old fans die off and the younger generation moves on to other sports and video games.
We have been hearing that same message for maybe the last 20 years, yet here we are with team values at an all time high. Of course, the game will have to adapt as it has throughout its entire history. These people are not stupid regardless how much you want to believe they are.
Except, owning MLB teams is profitable, and ever-increasing valuations means their net wealth will vastly increase. It’s a great investment.
@ Barkerboy;
1. The owners hardly buy teams as a “vanity project”. For most it’s a year-round full time commitment, 25/7/365.
2. I agree that MLB is in trouble. They should have had explosive video ratings during COVID, having a captive audience at home. Instead ratings went down. They persist in bringing politics into the sport. Many consumers turn to sport specifically to watch something which is not preaching to them (as almost everything entertainment related is). People under 45 did not grow up playing the sport much, they do not understand it, and they find it boring to watch.
3. As for this article – the valuation of a franchise does not necessarily correspond to operating losses. Houses/dwellings may go up in value. However, and if owner is renting the property and the rental market in that area is poor, the owner has a “negative cash flow” – which is fancy way of saying that he/she has expenses that are higher than the cash taken in. That is happening to more franchises in MLB today. The ponzi scheme can be kept alive as long as the franchise values go up….until they don’t.
I’d suggest that sports as we know then are in a bubble. The reason is as you say – young adults have grown up with computer and video games – powered by Artificial Intelligence. Those products continue to improve and excite consumers. There are only so many hours in the day. People are moving from passively watching entertainment on a screen (TV programs, movies, sports, etc.) to doing things via the Internet that they can be a participant in. What is happening today due to technical advances is every bit as historic as in the early part of the 20th century when the automobile replaced horses as well as the implementation of mass production in manufacturing and mass communications with the introduction of radio and telephones. Everything in our world is changing, and it’s happening at lightening speed.
@Samuel – 100% agree on Point #2.
Although I’m 40 and played baseball from a young child and understand it completely. Which makes me a “purist”.
I am disturbed with baseball bringing politics into the sport. Just like you mention, I use sports as an escape and to relax. I do not want to be preached to (one way or another). The mixing of sports and politics, regardless of agreeing with the leagues position or not, is turning me off.
When did they bring politics into the sport?
Politics has always been in sport. People have become so sensitive to everything that they don’t agree with that they get all bent out of shape when it happens to offend them. When you agree with it, you don’t think of it as political. But it has always been there.
LOL
Politics is there in one form or another from the start. Team names are political, honouring veterans or having flypasts is political, singing anthems or (ugh) God Bless America is political. Allowing other political opinions seems to be the problem a lot of people have with the recent period.
You beat me to it.
Policy decisions by state and local governments are inherently political: government funded stadiums and arenas, tax breaks for stadium and team operations, free or below market rate leases for stadiums/arenas or the land on which “privately funded” are built, the benefit of financing “privately funded” stadiums/arenas with tax exempt “municipal” bonds, the use of eminent domain to obtain property for stadiums and arenas, etc. And, there are federal, state, and local tax laws and regulations that allow deductions and accounting methods that allow reduced tax payments by the teams or their customers. These are political calculations made by state and local governments based on what elected officials think their constituents want and projected economic activity teams may generate.
Here it comes. The owners are mean billionaires, horrible people. Ugh!
Mathematically they are mean billionaires, $1.9 billion on average according to the article.
By what mode did they make their money?
You can only make a billionaire by exploitation
@ anthonyd4412 and Armaments216;
Thank you for proving that Americans are overwhelmingly economically illiterate.
A person owning a property valued at something doesn’t translate into their net worth.
They have debt (people seldom pay cash for large properties). ongoing expenses, etc.)
Recently Henry of the Red Sox (a true billionaire and financial wizard) took on more investors in the franchise. If he owned it outright, why did he sell to others? Heck, even the Steinbrenner family has investors in the Yankees. Most sports franchise do.
Samuel, thank you for your inane pedantry. Yes, teams’ majority owners generally do not own full MLB teams outright; only a portion of that team’s value, net of any obligations, would be counted toward that individuals’ net worth; but it’s also extremely unlikely that the ownership share of that team is the only positively valued asset owned by that individual. That said, I can’t believe I’ve taken this much time to respond to this nonsense.
Exactly.. Maybe the government can take over MLB and other companies so it can ruin them, just like it has trashed everything else it is in charge of, or in the process of trashing.
They have already done all that. Haven’t u been paying attention?
And why, exactly, are owners requesting that the City’s use tax dollars to help pay for stadiums?
Because local governments are dumb enough to do it?
Amen to that. I just don’t understand why the City’s fold to these clubs. That’s tax money that could be spent elsewhere on more important things (ever seen Philly’s roads!?!).
I could see it if Baseball was going the way of Chrysler in the 70’s, but it’s just the opposite.
One could argue that municipalities using tax money to build lavish parks for MLB is why the salaries for the players are so outrageous. It’s not like the owners for the product have to take on that expense.
Does a fast food franchise thinking of moving into an area ask the area to finance a building for them with tax money because the people in the area can enjoy the product and it creates jobs for residents?
Nope. Just a couple temporary tax breaks (which could be modest or criminal depending on where the locations is) to entice the business to build in that location then say, the next county over.
Lots of businesses negotiate favorable tax treatment which the residents pay more. It’s the same thing.
A 3 percent ROI is not all that great. MLB is not the fantastic investment where Owners make money hand over first that some fans think.
I don’t know. Anything over 2% covers inflation. After that you’re making money. I know if I was getting 3%APY on my Savings account I would be signing yippee yippee.
Plus 3% of a couple billion is quite a lot of money.
It is the opportunity cost associated with a 3 percent ROI. These guys could easily make more then 3 percent elsewhere on their money if it was a pure investment.
A bank account is hardly an investment.
There is a reason the Worlds richest do not own a MLB team, they can make a much better ROI elsewhere.
@ Spanky McFarland;
Sorry to be the one to tell you this…..
But if you’re putting your money in a bank today and accepting that interest, then rest assured you’re in a small minority. Note that banks are closing branches around the country and adapting Crypto processing. As for your return….
Inflation is coming
Steel +145%
Lumber +126%
Oil +80%
Soybeans +71%
Corn _69%
Copper +50%
Silver +38%
Cotton +35%
Coffee +34%
Wheat +25%
FAO Food Index +25%
Cattle +21%
Bitcoin +470%
Stock Market +23%
Home Values + 8%
Hourly Wages +5%
Money Supply Up +24%
Reported Inflation +1%
Oh, I know, I was just using the Savings account as an example. It’s a smaller amount of money that I keep around for emergencies. So if it went from the current 0.4% to 3% I wouldn’t mind the increase, but it’s not like I’m trying to get rich. No one gets rich on saving money.
I’m certainly in the minority. Most Americans don’t even have a savings account let alone as little as $400 set aside for an emergency.
I suppose that’s economics and better left for another forum lol.
It’s risk versus reward. How does the risk of owning a franchise compare to other industries? Some investments are backed by the government in one form or another and considered “risk free”. That’s the floor. Then there’s the balance sheet versus the income statement. Do these franchises have invested assets earning income? Are they meeting their expenses with their revenue? What part of annual return do each of these contribute towards?
No one gets rich on saving money?
That’s exactly how we’ve done it.
There’s a whole segment of the top 1% who’ve gotten there by saving. We’re not there, but it’s pretty high up.
This is all Smoke and Mirrors. MLB, NBA, NFL have alienated their fan bases, the Fans aren’t coming back. TV ratings are a fraction of what they were just a couple years ago. Once the current tv deals expire the leagues aren’t going to get anywhere close to their existing deal.
TV ratings only make one one part of viewership, there is a wave of fans moving to streaming so going by TV ratings to access the health of a sport is wildly inaccurate .
I’d so pay for mlb.tv is the black out BS would go away…. i have multiple black outs.. pit, NYY, mets aswell i think. I haven’t tried but i think Blue Jays and Cleveland as well. I’m sure i could work around it….. just don’t want to if i’m paying for it.
Yes the Blue Jays are Def blacked out out. I agree , MLB would grow their streaming base by leaps and bounds if they ended the black outs and then shared the revenue with the applicable team. It is hurting them with the growth of the younger fanbase .
That’s my argument with MLB.TV. I live in Denver but watch the Phillies, so I get all but 6 games per year. If I could get the Rockies added to myMLB.TV package for a little extra, I’d do it without question.
The balckouts are a joke, especially in the Northeast with all the teams so close together geographically.
but but… pirates ownership is greedy!
one of the lowest estimated value… one of the lowest payrolls more so in a couple actual rebuilding years….. sure they can spend more and 1b value is nothing to shake a stick at.. but makes a bit more sense
So the only franchise NOT to have an increase in value was Tampa (adjusted for inflation, they lost value). And one of the “architects” of this failure is now running the Red Sox (at least this week.). And they managed to fail that bad while having a successful product.
Mmmmmmmmmmm..
Stop that or you’ll get traded to the yankees.
See that Hal. You can afford the luxury tax.
Cardinals might need an entire OF